Failure in Addis Ababa: trouble ahead for development

Despite setback on tax issues, civil society more motivated than ever

The Addis Ababa Outcome Document for the Third Financing for Development Conference is now closed. The final outcome rejects the proposal of establishing an intergovernmental UN body on tax matters, and instead introduces some minor changes to the existing UN expert committee. This means that the OECD will remain the only intergovernmental body that adopts global standards on tax matters.

“This is not only a tragic day for the world’s developing countries, who will now have to accept that global tax standards will get decided in a closed room where they are not welcome,” said Tove Maria Ryding, Policy and Advocacy Manager of the European Network on Debt and Development. “It is a tragic day for all of us, because a global tax system where half of the world’s countries are excluded from decision-making will never be effective. As long as our governments keep failing to cooperate on tax matters, multinational corporations will be able to dodge taxes. At the end of the day, the Addis Ababa failure will impact us all.”

“This came down to power,” said Alvin Mosioma, Executive Director of the Tax Justice Network Africa. “The powerful simply did not want to cede one ounce of their authority to the rest of the world, and they succeeded in preserving their control.”

“Developing countries have fought hard for this body but today’s agreement will do nothing but keep them in a patronizing system where a group of 34 countries hold all of the power,” said Pooja Rangaprasad of the Financial Transparency Coalition. “Rich countries decided to maintain a system where money goes from south to north, but the rules follow the opposite route.”

“Developing countries, including a number from Latin America, made their voice heard on the need for a democratic process,” said Jorge Coronado, President of Latin American Network on Debt Development and Rights. “But rich countries and their multinationals decided there would be no room for them.”

Although a small group of rich countries blocked a plan toward inclusiveness, the amount of pressure developing countries and civil society placed on the Financing for Development negotiations ensures that the spotlight will remain on tax and illicit financial flows.

“This text could have been agreed to on Monday morning,” said Pooja Rangaprasad, Policy Coordinator for the Financial Transparency Coalition “But many developing country governments stood up and said ‘no’, arguing that they must have more say in how global tax standards are drafted.”

“While we didn’t achieve the final win this week, the campaign is just getting started,” added Tove Maria Ryding, Policy and Advocacy Manager for the European Network on Debt and Development. “We’ve managed to deliver a message loud and clear: the days of the rich deciding for everyone must end.”

“Yes, we’ve had a setback, but seeing developing countries push hard for a seat at the table makes us more motivated than ever to stand in solidarity,” added Rangaprasad.


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